Behind The Music: Google Bungles Music Beta Launch, Leaves PO'd Record Labels In An Uproar

Google's Music Beta system sounds like a great idea from a user point of view—you get almost instant access to your tunes, no matter where you are or which computing platform you're using (the only downside being its gobbling of bandwidth). But watching the lackluster launch of the service, and reading some reviews of its performance, it almost felt like Google had rushed into it, with lackluster results. Now it seems sure that's what happened.

The sudden arrival of Music, with barely a rumor leaking immediately beforehand, is being blamed on the existence of Amazon's cloud music locker and the imminent arrival of Apple's cloud-based music system that'll likely be closely integrated with iTunes and Apple's many portable devices. Google wanted to maximize exposure of its service in the lull between Amazon's launch and the arrival of Apple's competing service, and presumably leverage the Google IO conference to gain even more media attention than would be possible with a stand-alone press event. This rush, it seems, has been partly responsible for Google launching Music Beta without the specific approval of the big record labels.

Now those labels are "pissed," according to a source speaking at the NARM conference this week. Industry veterans are livid that Google plowed ahead without any kind of deal with the labels—who ultimately own, and fight to protect, the IP of their music. Google did alert them just beforehand that Music Beta was on the way, but in public statements it also hinted that the lack of any deals was due to the labels themselves and "unreasonable" demands.

Google and the music industry had been negotiating, but didn't reach a conclusion before the May 10 launch of Beta. The discussions were confused by Google allegedly changing its plans often, adjusting how Music would actually work in ways that fundamentally changed how the labels thought about their IP, and thus how to license it. Particular bum notes during the deal discussions included pricing, with the labels chasing up-front payments in differing sizes (which led to reconsideration by labels who'd pitched for smaller advances). Piracy concerns were raised because Music users may be able to upload music they'd "stolen" to Google's servers in the same way as legally bought tunes, and the labels wanted to prevent this and also persuade Google to unlink piracy sites in its search pages. Finally, the music-locker competition weighed heavily on label's minds, with concerns that a deal with Google may compromise a potentially more lucrative deal with a different service that appealed to more users.

These latter concerns seem well founded. A separate report based on word from a music industry insider (presumably one of the "pissed" group) suggests that Apple's cloud music service will be much better than Google's and Amazon's, offering a similar range of services—with perhaps a little more UI polish than Google manages—but actually not offering the same "options." This is a hint that Apple's deals with the labels may have resulted in a different business model, with perhaps no need for users to upload their tracks to Apple's data center and the music instead coming from reference files approved by the labels.

The music biz hasn't exactly got the shiniest reputation when it comes to business contracts, but in this case it seems the bully at the table was Google—and Music Beta may have suffered significantly as a result, perhaps damaging its long-term chances.